Mar'ie sees rupiah fall as excessive

JAKARTA (JP): Minister of Finance Mar'ie Muhammad has said the rate of the rupiah depreciation against the American dollar had, thus far, been extremely excessive and in defiance of all sound economic parameters.

"The rupiah rate, which has lately hovered between 4,950 and 5,000 to the dollar, no longer reflects the true condition of our economy," Mar'ie said over the weekend in Bengkulu.

He expressed confidence that the rupiah would eventually strengthen to a more reasonable rate. But he stopped short of estimating what should be the real worth of the rupiah vis-a-vis the greenback.

"I don't think something that is abnormal could last forever," Mar'ie said when he inaugurated a new venture capital company in Bengkulu, a province in southwest Sumatra.

The rupiah closed last week at 5,000 against the dollar, reflecting a 53 percent depreciation since July, when financial crises started in several East Asian countries, beginning with Thailand.

Mar'ie sees the currency turbulence facing the nation as much more than simply a monetary upheaval.

"We are encountering uphill challenges or a crisis of the 21st century." he pointed out.

But this does not mean we are entering a dead-end dark tunnel, Mar'ie added.

"Instead of being mired in pessimism, we should work harder, pooling our resources and doing our homework to get out of this crisis."

He said not all businesses were bleak amid the currency upheaval, citing agrobusinesses such as shrimp farming and tree crops as quite promising in the export market.

"These agrobusinesses are very promising because their costs are almost entirely in rupiah and their products are enjoying strong demand in the international market," he pointed out.

Mar'ie added that the newly established venture capital company would help develop small businesses in Bengkulu through equity and loan funds.

PT Sarana Bengkulu Ventura is jointly owned by the state venture capital company PT Bahana Artha Ventura, businessmen Hutomo Mandala Putra, Robby Sumampouw and Rully Chairul Anwar, and major companies such as PT Gudang Garam and Bank Central Asia. (vin)